By Don Muret, Staff Writer, SportsBusiness Journal
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Yum! Brands Inks 10-Year, $13.5M Deal For
Naming Rights To Downtown Louisville Arena |
The Louisville Arena Authority has signed a 10-year, $13.5M naming-rights deal with Yum! Brands for the new 22,000-seat downtown arena opening in October. KFC Yum! Center is the official name of the $238M facility. The deal was announced this morning during the authority's monthly meeting. Yum! Brands is based in Louisville and also has its name on Yum! Center, the Univ. of Louisville's basketball practice facility that opened on campus in '07. Louisville Arena Sports & Entertainment Properties, the authority's marketing consultant, is a subsidiary of Learfield Sports. Team Services was the firm that brokered the deal. Officials also talked with local companies Brown Forman, Humana, Norton Healthcare and Papa John's about buying naming rights, said Team Services Principal E.J. Narcise. Norton Healthcare was the arena's first founding partner, signing a 10-year, $10M deal in March '09. Yum! Brands' naming-rights deal is tied to a five-year option that could stretch the deal to 15 years. The authority and Yum! Brands can exercise that extension in the eighth year of the initial deal, according to contract terms. As part of the deal, patrons will be able to buy the food of Yum! restaurants KFC, Taco Bell and Pizza Hut at seven arena concessions stands. Yum! Brands also receives a group suite at center court, digital message rights, interior signs and premium hospitality options. Its brand will also be on the arena roof.
LESS THAN ORIGINALLY ASKING FOR: The deal, valued at $1.35M annually, is substantially less than the 20-year, $40M contract authority officials had been soliciting the past few years to name the venue. At that time, arena principals remained confident they could command $2M annually to name a seven-level facility containing many of the same amenities of an NBA arena, with 71 suites, 2,584 club seats and 62 loge boxes. The authority, however, wanted to find a local partner with a strong presence in the community, Narcise said. Yum! Brands employs 1,400 local workers and has donated about $35M to more than 100 nonprofit organizations since it became a public company in '97. "Certainly, the economy caused us to recoil on the terms, but there were many nuances that drove this deal," he said. "Yum! didn't have the same requirements we had packaged at $40M over 20 years." To date, Louisville Arena Sports & Entertainment Properties has sold more than $37.5M in arena naming rights and founding partnerships for the building. Besides Norton Healthcare, other founding partners are investment firm Hilliard Lyons, Stock Yards Bank & Trust and downtown Louisville hotel the Galt House. The arena properties group continues to negotiate with Brown Forman, Humana and Papa John's on potential founding partner deals, Narcise said.
